One policymaker likes to call 2005 the year of ``the perfect storm'' _ and he wasn't just referring to the tsunami.

The human tragedy aside, the great wave that swamped Thailand's Andaman coast dealt a setback to an economy that had been ticking along quite nicely. It could even be argued that if the knock-on effect of the tsunami had not put a big dent in domestic demand, the local economy might have been able to take other challenges in its stride.

Those challenges have been amply documented _ rising energy prices, intractable violence in the South, concern about bird flu to name a few. Even the political stability that comes from a one-party majority government has taken its knocks, in the form of a recent campaign by media firebrand Sondhi Limthongkul, who used to count Prime Minister Thaksin Shinawatra among his best buddies.

Mr Thaksin's Thai Rak Thai government at the start of 2005 embarked on a second term with a goal to transform an economy that it claimed to have revived in its first term. It has built a respectable record in terms of laying a foundation for greater domestic demand. It also has a clear focus on how Thailand can stake its claim in the wider world.

A centrepiece of this strategy has been a push for bilateral free trade agreements but these have aroused heated debate. Some critics say Thailand is proposing to give more than it gets _ a claim Mr Thaksin's advisers reject.

In any case, the government faces a delicate balancing act as it tries to create the conditions for success.

In the 2005 Year-End Economic Review, Bangkok Post writers examine the themes that have emerged over the past 12 months and look ahead to developments that will have an impact on the country's progress in the years to come.